A Compendium of Financing Sources and Tools to Fund Freshwater Conservation

This report provides an overview of traditional and innovative funding sources that can be used to finance freshwater conservation. While this document was produced for TNC’s Colorado River Program, the information presented is intended to serve as a general reference applicable to a variety of freshwater conservation finance challenges. Although historically applied mainly for land conservation, most traditional funding sources can be adapted and used to finance freshwater conservation activities as well.

Sections two and three of this report discuss the advantages, disadvantages, enabling conditions and lessons-learned associated with traditional state, local and federal government conservation funding programs. This report also seeks to develop a better understanding of innovative market-based conservation finance tools that are either under development or currently being implemented in pilot programs. Examples include direct payments for ecosystem or watershed services and ecosystem services markets.

Section four of this report provides an analysis of the benefits, enabling conditions and potential pitfalls associated with these innovative, market-based funding mechanisms.

This report is not intended to provide an exhaustive assessment of all potential sources of freshwater conservation funding. The intent is to identify traditional and innovative sources that have been successfully applied in the past or show future promise. Funding mechanisms discussed in this report were also chosen based on an initial assessment of potential applicability in large river basins.